How to Rack Up Credit Card Rewards (but Not Debt) This Holiday Season

by Brittney Myers | Updated Sept. 2, 2021 - First published on Oct. 21, 2020

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A woman writing a gift list while holding a credit card and phone with oranges and spices on the table in front of her.

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Maximize your credit card rewards and give yourself the gift of cash back or points.

By the time we pack away our holiday decorations, the average American will have spent over $700 on all the trappings of the season. That includes gifts, food, and travel. With that kind of spending, it's easy to see how many shoppers will still be paying off their holiday purchases long into the new year.

Before you even start shopping, you need to have a solid holiday spending budget. It can help you stay on budget -- and out of debt.

But that's only half of the equation. In addition to deciding how much to spend, you should think seriously about how to spend. Consider using one of the many great rewards credit cards. With a little extra planning -- and a few tips from us -- you could turn that $700 in purchases into hundreds of dollars' worth of credit card rewards.

Pick the perfect card for each purchase

Your first step to maximize your holiday credit card rewards is to make a list. Map out who, what, where, and how much. Once you have an idea of where you'll make your purchases, you can decide which credit card to use for each one.

The idea is to use the card that will earn the most bonus rewards for each purchase. For example, during the fourth quarter, many rotating-category cards will offer bonus rewards for shopping online or at popular retailers. You could earn up to 5% back on your Amazon or Target haul.

Even gift cards can earn rewards with some, but not all, credit cards. As many grocery stores, gas stations, and office supply stores sell gift cards, your trusty everyday rewards card could be a secret holiday shopping weapon.

Use issuer portals to stack rewards

In addition to your credit card's regular purchase rewards, you may be able to increase your savings through issuer shopping portals. Many major credit card issuers have online portals with exclusive cardholder deals and discounts. Shopping portals can be accessed right from your credit card account, whether online or through your issuer's mobile app.

The types of deals vary. You'll find everything from bonus points for every dollar spent with a specific retailer, to cash back rebates for hitting a set spending limit on certain purchases. For example, eligible American Express cardholders can earn an extra four points per dollar spent at Adidas.com through Dec. 31, 2020 up to a 5,000 point limit. There's also a separate deal to earn $10 back on a $25 purchase at a BP or Amoco station before the end of the year.

Some offers will need to be activated and added to your card, while other discounts might require you to use a special link when you shop online. Pro tip: If you use a discount portal link to shop online, make sure your browser can save third-party cookies. Browser cookies act like digital footprints, letting your issuer know you used a link from their portal.

Spend strategically to earn sign-up bonuses

If you don't already have the right cards for the job, don't despair. Instead, consider this an opportunity to scope out some valuable sign-up bonuses. After all, $700 could go a long way toward a minimum spending requirement to unlock a pile of points.

Think strategically. Don't simply choose the largest sign-up bonus you can find -- choose the largest sign-up bonus you can earn. In most cases, the bigger the bonus, the bigger the spending requirement. You don't want to land yourself in debt chasing a sign-up bonus. The additional interest you'd pay will quickly wipe out the value of your extra rewards.

You also need to think beyond the bonus. Many cards with lucrative sign-up bonuses also have high annual fees, so do the math to ensure you'll come out ahead. And don't think you can simply earn and run, either. Some issuers may claw back your bonus if you cancel your card right after the points hit your account.

Resist the temptation of store cards

It's no secret that retailers amp up their advertising around the holidays, but it's not just their products they're promoting. Most cashiers -- and even online shopping carts -- will do their best to get you to sign up for a new store credit card before you check out. They may tout a discount or financing deal on your current purchase.

Resist the temptation.

Not only will your credit usually take a small hit if you sign up for a new card, but store credit cards are rarely worth the trouble. Closed-loop (i.e., only usable in a specific store) retail cards tend to have some of the highest APRs around. That makes them expensive if you carry a balance. Plus, low credit limits mean your credit utilization ratio may skyrocket with even minimal spending.

And that's before we talk about the fine print on that too-good-to-be-true financing deal. Most retail cards offer deferred interest periods rather than 0% intro APR. This means you could be on the hook for every penny of interest if you fail to pay your financed balance in full before the 0% intro APR period expires. Stick to 0% intro APR deals from regular credit cards, as these rarely include deferred-interest gotchas.

The gift that keeps on giving

The joy of seeing loved ones light up when they receive the perfect gift is a reward all its own -- but it isn't the only way to get rewarded this holiday season. Careful curation of your credit cards can help you earn cash back, points, and miles. You can put them toward paying off your purchases or even plan the perfect post-holiday getaway.

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